PriceWaterhouseCoopers have issued a report on the impact of shale gas on the economy, which seems to take a rather different view to previous pontifications on this subject. According to BBC Business, PWC reckon that shale will add a trillion dollars to world GDP, with conventional producers like Russia being big losers. In a second story, on the Scotland pages, it is revealed that the report's authors expect oil and gas prices to be significantly depressed by a surge in shale production.

I'm sure Mr Cameron will see this as an opportunity to apply further taxes.

Reader Comments (35)

If oil prices fall because oil reserves are now expected to last longer and so the Hotelling effect is diminished, there is no economic case for more taxation. On the other hand, if we believe climate change to be a threat, and oil is one of the biggest contributors, there is an economic case for taxing oil for the climate change damage it causes. Falling oil prices might open up a political window for this taxation to be introduced.@cwhope

I caught the tail end of an item in the business section of Radio 4's Today programme, just before 6.30am. I suspect it was discussing the PWC report. There was some idiot from Friends of the Earth talking about catastrophic climate change and how we must decarbonise the economy by 2030 and have clean, green renewable energy and that we mustn't have shale gas. I think these eco-fascists are getting really desperate at the thought of all that clean, green gas.

The Greenies are going to have a hard time holding back the shale gas bonanza. If they were offered a small percentage of shale gas profits to refocus on real-time pollution. Like how to get rid of windmills and then get them to promote this http://climateofsophistry.com/2013/02/12/carbon-positive-campaign/ maybe they could be of some use.

A glut in supply has always suppressed price, it is a law of economic fact. However, FoE, WWF, Greenpeace, in propagating the anthropomorphic warming myth have managed to bamboozle, even claim to refute observed empirical scientific facts. Economics - a far less precise discipline and that's being kind [ho ho] - you can say what you like and the FoE et al oft do - to favour their own chosen forms of green idiocy.

PWC, in pointing out a few plainly obvious truths would and guaranteed to - put more than a few cats amongst the fat green eco pigeons.

I expect Russia will be a loser in terms of the short term selling of gas, but I can't believe that the biggest country in the world will be shalegasless, so that will give them a boost to their economy.

The question is, who would want to be the politician that held up the development of cheap energy while the rest of the world goes for it full tilt? Ed Miliband isn't there anymore, I doubt there's a politician stupider than him. Where did he go by the way?

"From next April, the Government will be imposing its swingeing new “carbon tax” on every ton of CO2 emitted by producing electricity from fossil fuels, rapidly rising from £16 a ton to £70 by 2030. In all the media’s obsession with how fast our energy bills are rising, this is scarcely ever mentioned. But this tax alone will add billions a year to our bills. Within 17 years, it will be well on the way to doubling them. And of course it will apply just as much to electricity from shale gas as it will to that produced by the coal-fired power stations, currently producing nearly half our electricity, which the Government wants to drive out of business as soon as possible.

So, at just the time when the Government reluctantly holds out to us the prospect that the gas we will need to keep our lights on might become very much cheaper, it will be imposing this new tax to make it very much more expensive, thus cancelling out much of the financial benefit shale gas could bring us."

Typical BBC coverage of more good news about fracking.Fourth pqaragraph:"However, there are concerns over the process by which the gas is extracted, known as fracking."Photo caption:"Fracking has been blamed for the pollution of water supplies and causing earth tremors"Diagram:Usual misleading diagram showing the water table disproportionately close to the fracking action.

Will we ever see an article about fracking from the BBC which is not shot through with alarming caveats about this decades old and proven technology?Now, I do not think any of us can really know exactly what all the the environmental and social effects of widespread fracking in the UK would be.....but one thing is sure. If the BBC had their way it would never happen.Is there any way to hold them to account for this relentlessly negative portrayal? One must presume not or surely those interests trying to carry out fracking would/should started in on it already.

Whatever the eventual yield of shale I think you can judge its potential by looking at the fear in the opponents e.g. the enviro's and Russians. Looks like some people do believe in it ;)

Looking at RT recently I saw a story about a Ukrainian politician who objected to shale exploration in his country on environmental grounds, looking into it further I found this item on the english language Kyiv Post:

The Communist Party of Ukraine has opposed the project on shale gas extraction in the country, said Party Leader Petro Symonenko.

"We firmly oppose the project. Instead of economic independence, as the power assures, ecological and economic damages will be made," he said at a press conference in Kyiv.

So maybe a definite example of the Red/Green threat we have been hearing of? Although hiding neither colour like a watermelon ;)

The first comment on that article seems to answer him well:

"This from the Party who destroyed treasured environment and natural heritage of Ukraine and the Soviet Union for decades... This is merely a cynical and thinly veiled attempt to reinforce Ukraine's slavish reliance upon Russia and Russian gas. Nothing more."

So my cynical head says, whilst the Beeb may be instinctively conservative on shale, I'd look out for more Russian backed propaganda, e.g. Andrew Rawnsley's recent anti-shale "frack head" piece comes to mind, in which he used an advisor from a Russian investment firm to provide back up.

The BBC starting getting this in early. On Marr this Sunday they had Natalie Bennett current head of the green party although she only polled 2.5% at the last election. She stated that shale gas would only supply 10% of our needs and would Industrialise the countryside. Strange how they always gloss over how windfarms Industrialise the countryside and are much more intrusive than extracting gas will be. See photo's of post drilling shale site here http://www.ukoog.org.uk/

The BBC Today item on the PWC report is now at http://www.bbc.co.uk/programmes/b01qjj97 starting at 21m34s. The usual BBC intro about controversial method and earth quakes.John Hawksworth from PWC: can use the economic spoils to invest in renewables.Tony Bosworth from FoE: ranted on and on about catastrophic climate change and leaving all fossil fuels in the earth etc etc.

The Poll Tax was direct taxation. Suddenly, millions of people who had never had a tax bill had a tax bill. Even if you were unemployed, on benefits and/or living at home you got a bill. The thought of having to actually contribute (you only got a 90% discount if on benefits) was anathema to so many organisations that they paid to transport tens of thousands of people to the protests.

The Climate Change Act and the Carbon Tax is paid by somebody else and it is always "somebody else" who should pay more. The fact that it will cause higher energy bills doesn't matter because the higher energy bills are due to profiteering capitalist pigs who don't care how many are in fuel poverty as long as they have their champagne and caviare and as soon as we nationalise these industries fuel prices will drop and everything will be ok again.

Napoleon's apocryphal remark about the British being a nation of shopkeepers sometimes seems too generous.

There is no shortage of people in the UK who think anything produced cheaply in large amounts is not desirable, either ethically or economically. They tend to be the sort of people who think we can all become wealthy by merely re-selling the same houses to each other at ever higher prices.

It's not only at the BBC that you find sea-slugs with disposable penises.http://www.bbc.co.uk/news/science-environment-21431678

"A report from PricewaterhouseCoopers (PwC) said Scotland is in a prime position to “capitalise” on shale gas, which is produced by fracking, due to the expertise that already exists in the country’s oil and gas sector....The SNP government has heavily promoted renewable energy such as wind farms rather than encouraging the use of fracking to extract gas supplies.

A Scottish Government spokesman said: “In Scotland we need a diverse and balanced energy portfolio to provide us with secure and affordable heat and electricity for decades to come and alternative energy reserves such as shale gas and coal-bed methane if sourced and produced with due regard to the environment can fit within Scotland’s energy mix.”

Shale gas in the UK is only economic while the gas price is high. If the price drops significantly it will discourage further investment in shale gas, and maintain a high equilibrium price. The only reason why US gas prices are so low at present is that they have a temporary glut of gas and no infrastructure for exporting it.

There is also evidence that the economics of shale gas are less rosy than first thought , with shale gas wells less productive in the longer term than first thought.

@Philip Bratby...I had the misfortune to watch a webcast of my local district council's planning committee discuss plans for a local four-turbine installation. What got to me was the fact that when the techie 'proposer' of the plan talked about the green and 'reliable' power the turbines would produce, not one councillor asked him what he meant by the term, 'reliable'.We are truly led by donkeys - who would do much better in Tescos!

Entropic Man"Regardless of climate change implications, it would be premature to base too much long term planning and investment on what may be an illusion of plenty."

That is not a reason to prohibit it. The industry is capable of making it's own assessments and investment decisions. And if a privately owned company wishes to make a poor return by supplying the UK market with gas (and possibly oil too), why should I want to stop them?

Jack S; 09:30.You are so right. The beeb could just as easily - and with more accuracy - describe shale as the "driver of huge economic growth in the US", for example.Quite how the industry can go about changing that portrayal, I have no idea since it seems to be an entrenched mindset. Wonder how they would react to continual slurs along the lines of "the BBC, the broadcaster that covered up Saville"?

Note that wind power, (which I assume rhoda referred to) is competitive with other renewable and non-renewable methods, under the Climate Change Act provisions. Even unabated gas is only slightly cheaper.

Come on entropic, you are not sceptical, you are hostile. A sceptic would say "let them get on with it, unsubsidised, on a level playing field with other technologies", with confidence that the truth will out. If shale oil and gas were uneconomical and wind economical, as you assert, there would be no howling from the renewables sector about uncertainty over future subsidies - they would be confidently getting on with the job as the US, and Shell in the Ukraine, are doing with shale.The only way wind power is competitive, as Bob Ward's hedgie mates assert, is if the Climate Change Act is used to price fossil fuel out of the market, and then only for the UK and not for global markets - can you see Russia or China or Brazil handicapping themselves in this way? UK industry and households would end up paying even more severely surcharged rates for energy, with catastrophic consequences for our competitive position and fuel security.

In New Zealand we had the Green politicians jumping on the fracking "scarmongering machine" last year. They demanded an inquiry and duely got the Environment Commissioner to oblige. The report came out late in the year basically saying fracking ( for oil or gas )was OK as long a various regulations that are already in place are adhered to. Of course the Greens responded like spoilt school kids who had not been given their sweets !! But the biggest laugh was to find out that the main author of the report was a Green who had stood for Parliament in our previous election. Given they were looking at fracking for NZ conditions ( we are not called the shakey isles for nothing !!)we also had researchers who probably would have looked for any thing to support their friends but they still did not come up with anything significant.

In economics, even when there are huge net benefits, there are always some losers. In the case of oil, it is a shift from the existing producers to the new entrants (including new "conventional" oil production, like in Brazil and the Canadian tar sands) and the billions of consumers worldwide. The problem is that the gainers only gain by a little, over a long period, whilst the losers are very few with losses often more immediate.

"I'm sure Mr Cameron will see this as an opportunity to apply further taxes."

You think? I am more sure that "greenest idiot ever" Cameron, in the interest of his crooked subsidy farming in-laws, is more likely to come up with an excuse to ban fracking and shale gas development.

You cast aspersions upon the reliability of an energy source (gas) and then, in virtually the same breath, bang the drum for another energy source (wind) which is guaranteed to be inoperative when the weather is not favourable, and which only exists because of large subsidies.

There is already such a thing as a network of pipelines bringing gas from Norway and Russia. Modern supertankers are being constructed to transport liquefied gas around the world from Gulf states.Gas-transportation issues are not going to be a supply problem.

Lastly, with or without government encouragement, no generating companies are going to build power stations unless they believe they can fuel them. This returns us to our starting point: If oil/gas companies are not the most technically competent people to source and supply oil and gas using their shareholders funds, then just who is?